Title: A Peek into the Future: Kazakhstan’s Economic Strategy and Growth in 2025

The Kazakhstan economy is projected to experience a moderate growth rate of 4.6 percent in 2025, as foreseen by the International Monetary Fund (IMF). This forecast implies that the country is ready to overcome recent economic hurdles such as the COVID-19 pandemic and the financial upheaval caused by the Ukrainian conflict. The upcoming period will mark an essential phase in Kazakhstan’s economic expansion, and the government already has a solid strategy in place.

In the previous year, Kassym-Jomart Tokayev, the Kazakh President, set an ambitious goal to double the Gross Domestic Product (GDP) to $450 billion by 2029, the end of his presidency term. This goal, while ambitious, is backed by a credible strategy aimed at enhancing the economy and elevating living standards.

A key part of this strategy is acknowledging the need for Kazakhstan to stimulate both domestic and foreign investment by limiting the state’s role in the market. This approach is supported by leading local policymakers as well as international financial institutions.

However, recent remarks from President Tokayev have raised concerns about his dedication to the plan and Kazakhstan’s long-standing goals to develop a market economy. In a recent interview with a local media outlet, he criticized his economic team, stating there was a lack of concrete action and an overreliance on international financial institutions.

President Tokayev’s comments reveal a contradiction in the administration’s economic approach. While it promotes a strategy centered on economic liberalization, there are also calls for increased state involvement in the economy. This dichotomy has seen the government sometimes resorting to economic populism.

During his interview, President Tokayev referred to Kazakhstan as a “social state.” Indeed, around 35-40 percent of the GDP is generated by state-owned enterprises, and state lenders provide subsidized credit across the economy. The government also controls the prices of key household commodities like gas, electricity, and fuels.

The administration has also introduced populist economic measures, such as car loans and debt relief for a significant portion of the population. Yet, there are limitations to state intervention, as evidenced by the severe blackouts experienced in 2022 and 2023 due to the deteriorating state of its power generation facilities.

Excessive government spending also contributes to inflation. The National Bank of Kazakhstan (NBK) has managed to reduce inflation from a high of 21.3 percent in 2022 to 8.6 percent in the following year. However, it has yet to bring inflation below its target of 5 percent, with increased government expenditure remaining a significant factor.

The Kazakh government has been striving to foster competition and dynamism by reducing the state’s role in the economy. But the reality suggests that significant privatization is unlikely. There appears to be no urgency within the government to prepare companies for initial public offerings (IPOs), and the state has passed legislation allowing it to increase its presence in the economy.

Despite recent challenges, the Tokayev administration has made considerable progress in the economy, especially in reducing the role of monopolies and improving infrastructure. The government has also signed strategic agreements with the United States and the European Union on new industries like hydrogen and critical minerals.

The government’s commitment to deregulation is also vital for Kazakhstan to achieve its net-zero carbon emissions target by 2060. Market prices in the electricity sector will stimulate the transition from coal to renewable energy sources.

As President Tokayev enters his sixth year in office, the constitution gives him four more years to make a lasting impact. The successful implementation of these reforms could see Kazakhstan transformed by 2029, even if it falls short of doubling its GDP.